What is the standard deduction for salaried employees?
By Vijay Singh Sinhmar · Fintech automation specialist, 8 years in finance · Published 2026-10-11
In FY 2026-27 every salaried employee and pensioner deducts a flat ₹75,000 from salary in the new regime, or ₹50,000 in the old regime, automatically and with no bills or proof. It is the reason a ₹12,75,000 salary pays no tax in the new regime: without it, the tax on that salary would be ₹74,100.
Educational information, not investment advice · Muktify is not SEBI-registered
Tax Regime Calculator: New vs Old (FY 2026-27)
Enter your salary and the deductions you already have — see the tax under the new and old regime side by side, and which is lower for you.
CTC minus employer PF/gratuity — your gross taxable salary
EPF + PPF + ELSS + life insurance etc. (capped at ₹1.5L)
Self + family, capped at ₹25,000
Interest paid per year, capped at ₹2L in the old regime
Your eligible HRA exemption, if you rent (enter your computed amount)
New regime
₹97,500
tax per year, incl. 4% cess
Old regime
₹2.57L
tax per year, incl. 4% cess
You save ₹1.60L/year with the new regime.
Taxable income: ₹14.25L (new) · ₹14.50L (old, after your deductions)
Assumptions
- FY 2026-27 slabs; resident individual below 60, salaried.
- Standard deduction: ₹75,000 (new) / ₹50,000 (old). 4% cess included.
- Section 87A rebate applied in both regimes (incl. marginal relief in the new regime).
- Surcharge is not modelled — results above ₹50L income are underestimated.
- 80C is what you already invest — this tool never suggests investing more.
Educational estimate on your inputs — not tax advice. Verify with a tax professional before filing.
Not investment advice. Not SEBI-registered.
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Who gets it, and how
It applies to income taxed as salary, which includes a pension from a former employer. It is a flat amount rather than a reimbursement, so nothing has to be spent or shown to claim it, and your employer applies it before working out the tax to deduct from your pay.
It is claimed once per person, not once per employer. If you change jobs during the year, the two employers between them should apply it once, and your return is where any double counting is corrected.
What it is worth at different salaries
The value of the deduction is the tax you would otherwise pay on the deducted amount, so it depends on your slab. On ₹8,00,000 it changes nothing in the new regime, because the salary is inside the rebate either way. At ₹12,75,000 it is worth ₹74,100, since it brings taxable income down to exactly ₹12,00,000, the last rupee the full rebate reaches.
In the old regime the ₹50,000 is worth ₹15,600 to anyone in the 30% slab and ₹10,400 at ₹8,00,000, where the last ₹50,000 falls in the 20% slab.
| Salary | New-regime tax | Saved by the ₹75,000 | Old-regime tax | Saved by the ₹50,000 |
|---|---|---|---|---|
| ₹8,00,000 | ₹0 | ₹0 | ₹65,000 | ₹10,400 |
| ₹12,75,000 | ₹0 | ₹74,100 | ₹1,87,200 | ₹15,600 |
| ₹15,00,000 | ₹97,500 | ₹11,700 | ₹2,57,400 | ₹15,600 |
| ₹20,00,000 | ₹1,92,400 | ₹15,600 | ₹4,13,400 | ₹15,600 |
| ₹30,00,000 | ₹4,75,800 | ₹23,400 | ₹7,25,400 | ₹15,600 |
What it does not cover
It applies only to salary and pension. Interest, rent, capital gains and business income get no standard deduction of this kind. In the old regime it sits alongside the other deductions; in the new regime it is one of the very few that remain, which is why it moves the tax there so visibly.
Frequently asked questions
Is the standard deduction ₹75,000 or ₹50,000?
In FY 2026-27 it is ₹75,000 in the new regime and ₹50,000 in the old regime. Which one you get depends on the regime you are taxed under.
Do I need to submit proof for the standard deduction?
No. It is a flat deduction from salary or pension income, applied by your employer automatically and claimed in your return without any bills or receipts.
Do pensioners get the standard deduction?
Yes, where the pension comes from a former employer and is therefore taxed as salary. The amounts are the same: ₹75,000 in the new regime and ₹50,000 in the old.
Why is ₹12,75,000 the tax-free salary and not ₹12,00,000?
The ₹12,00,000 rebate limit applies to taxable income. Subtract the ₹75,000 standard deduction from a ₹12,75,000 salary and taxable income is exactly ₹12,00,000, so the tax is nil.
Related
- Is a ₹12 lakh salary really tax-free? →
- How do I save tax in the new regime? →
- How much income tax on a ₹15 lakh salary? →
- Tax regime calculator →
Last updated 2026-10-11. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument.
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